LaborChart builds its value with ‘robust’ Series A capital injection from Five Elms

A recently closed injection of growth and scale capital will help Kansas City-based LaborChart strengthen its team, expand the company’s market position and accelerate domestic and international growth, said Ben Schultz.

The move — finalized in the final days of 2019 and announced Thursday — is expected to jolt the team from a headcount in the high teens to about 45, as well as help support LaborChart’s physical relocation from the downtown/Crossroads area to new offices in Shawnee.

Taking on a significant investor wasn’t an easy decision, said Schultz, CEO and co-founder of LaborChart. The five-year-old, high-growth small business, which offers a workforce management platform to clients in the construction industry, has been intentionally under the radar and careful to maintain control over its product and deliverables to customers, he said.

“We want to be authentic in how we build LaborChart,” Schultz said. “A good part of 2019 was hunting for that right [funding] partner. And we did that from coast to coast, talking to many people, having some really good conversations.”

Ultimately, those discussions led LaborChart to Kansas City-based software investor Five Elms Capital, which was a solid fit for the LaborChart team’s personality and business philosophy, said Hunter Browning, CTO at LaborChart.

Terms of the deal, including the investment amount, were not disclosed.

“We’ve been pretty low-key and focused on value adding for the past five years of the business,” said Browning, whose previous ventures included founding Fannect and X-Lab KC. “We’ve been lean and scrappy the whole time, and really trying to make decisions geared almost exclusively around delivering end value to clients. … A lot of VC-type relationships can be very top number-driven, hype-driven relationships. Five Elms has really focused their portfolio on companies that derive actual value for their customers.”

Click here to check out Five Elms Capital’s portfolio of investments.

Peace of mind impact

The Five Elms deal offers LaborChart the opportunity to grow responsibly, while increasing peace of mind for its clients — particularly impactful as the company scales not only in the size of its team, but in the types of customers it can sign, said Schultz and Browning.

“As we start bringing on clients that are multi-thousand-person organizations, we need to have the support infrastructure to serve them,” Browning said. “The proof to date is already done. We know the software works. We know how to service our clients. We just want to be able to keep doing it on a bigger and bigger scale.”

LaborChart’s software addresses poor labor management processes that result in delays and cost overruns, according to the company.

“LaborChart was founded for the sole purpose of providing an innovative technology solution to an industry that has traditionally relied on outdated processes and methods,” said Schultz, himself a fourth-generation electrical contractor. “With LaborChart, companies are no longer dependent on white boards and spreadsheets to manage their workforce. They now have a secure, scalable, and modern application to schedule, forecast and communicate with their people, which is the most valuable asset of every construction company.”

Five Elms was impressed by the company’s easy-to-use, yet robust product, commitment to its strong culture, and evangelical nature of its customer base, said Stephanie Brown, partner at Five Elms.

“We spoke with many of LaborChart’s customers who were insistent that the platform is a mission-critical system users love,” she said. “Even the most tenured industry veterans were insistent they’d quit their job if someone took the solution away from them.”

LaborChart’s team was pleased Five Elms focused due diligence on client satisfaction with the product, Browning said.

“They’re looking at a lot of the same key metrics we do, rather than just saying ‘Hey, how much money can we wring out of this thing?’” he said.

Tyler Prochnow, Ben Schultz, and Hunter Browning, LaborChart

Scaling a client-focused team

As LaborChart prepares its move to Shawnee in March, the executive team is focused on hiring across all departments — product, sales, marketing, account management, and customer support — while still continuing to build out a comprehensive suite of advanced client-focused solutions, said Schultz and Browning. 

“We’re doubling down to make sure we have the space to create the right environment for people to come in and feel like they can spend all day, every day just trying to add value in a unique and special way,” said Browning.

Among the first new hires: Tyler Prochnow, who now serves as LaborChart’s president.

The co-founder of Think Big Partners and founder and original owner of the Kansas City Brigade arena football league, Prochnow was drawn to LaborChart’s proven software and business model — along with the authenticity of its leadership, he said.

It’s a rarity, Prochnow emphasized.

“I’ve seen thousands of businesses in Kansas City over the past decade — all sizes, shapes and stages — seeing a lot where the foundations were a little bit smoke and mirrors,” he said. “But when you come across a company like LaborChart that is foundationally solid, that was built on these core principles of delivering value to the customer and providing product market fit — well, there just aren’t as many in the world, or Kansas City, as you think think there should be. So when you see one, it really stands out.”

Schultz believes the capital injection from Five Elms will help amplify LaborChart’s ability to prove that reputation on an international scale, expanding beyond the North American market, he said.

“I’m just excited to get back to work. It’s been months of a lot of work outside the business,” he said. “It’s fun to put the focus back on the customer, back on the business.”